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Precious Metals Mixed on Fed Week

June 12th, 2017 by

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With attention squarely on “Fed Week” for June in the U.S., the precious metal prices were fairly quiet during early trading on Monday morning. Spot gold was virtually flat this morning, gaining about $1.10 an ounce to trade around $1,267/oz. Meanwhile, spot silver was down 11¢ to hover just above $17/oz. Platinum and palladium went the other direction, gaining 0.75% and 1.15%, respectively.

Eyeing a Rebound

Here are Friday’s closing numbers:

Gold: $1,266.40/oz (-$11.20, -0.88%)
Silver: $17.17/oz (-$0.23, -1.35%)
Platinum: $937/oz (unchanged)
Palladium: $861/oz (+$14.00, +1.65%)

This was the first weekly loss for gold in over a month, and erased much of the yellow metal’s rally from earlier last week. Strangely enough, as gold and silver have shed a bit of safe-haven demand, palladium has continued to charge forward. This is apparent not just from Friday’s action; the pattern is repeating itself on Monday. Year-to-date, palladium prices are up an impressive 26.8%, making it the best-performing commodity of any kind so far this year.

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The stock markets were mostly lower on Monday morning, especially overnight in Asia. Shares in Shanghai and Tokyo both lost roughly 0.5%, while Hong Kong’s main Hang Seng index fell 1.25%. The sell-off in the tech sector continued on Monday after the Nasdaq fell from its all-time high to end last week. This slump in technology stocks spread to the broader markets, Oil prices also lost more than 3% on Friday, continuing the downward slide that has repeatedly frustrated oil bulls.

The dollar held steady at about 97.2 on the DXY index when markets opened in New York, largely at the expense of the British pound sterling. The yen and euro remained fairly strong, but the “Hung Parliament” that resulted from last week’s election in the U.K. caused the sterling to drop to a seven-week low, losing 1.6% on Friday and tumbling another 0.7% on Monday.

Central Bank Meetings

This is a huge week for monetary policy around the world’s advanced economies, as the June meeting of the Federal Reserve Open Market Committee (FOMC) will take place on Tuesday and Wednesday. There appears to be an expectation that the Fed will raise interest rates again at this month’s meeting. The Fed will be followed by the Bank of England (BoE) and Swiss National Bank (SNB) holding policy meetings on Thursday, as well as the Bank of Japan (BoJ) on Friday. Aside from the usual attention that every Fed meeting garners, investors and traders around the globe will be watching to see if improving economic conditions and a more inflationary outlook in the U.S. will pull the cart of the global markets, or if these other central banks will be more hesitant to normalize monetary policy than their American counterpart.

 

The opinions and forecasts herein are provided solely for informational purposes, and should not be used or construed as an offer, solicitation, or recommendation to buy or sell any product.